British Columbia HST Regulations

British Columbia HST Regulations His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to sections 277a and 277.1b of the Excise Tax Actc, hereby makes the annexed British Columbia HST Regulations. S.C. 1993, c. 27, s. 125(1) S.C. 2009, c. 32, s. 37(1) R.S., c. E-15 Definition of Act In these Regulations, Act means the Excise Tax Act. Tax rate for British Columbia For the purposes of paragraph (a) of the definition tax rate in subsection 123(1) of the Act, the prescribed rate for British Columbia is 0%. Basic tax content — property in British Columbia For the purposes of determining, at any time on or after February 17, 2012, the basic tax content of real property that is situated in British Columbia or of tangible personal property that is ordinarily situated in that province, no tax under subsection 165(2) or section 212.1 or 218.1 of the Act or Division IV.1 of Part IX of the Act is to be included in determining, in respect of the property, the value of A or B in paragraph (a) of the definition basic tax content in subsection 123(1) of the Act or the value of J or K in paragraph (b) of that definition. Basic tax content — selected listed financial institutions For the purposes of determining, at any time on or after February 17, 2012, the basic tax content of property of a person that is, or was at any time, a selected listed financial institution, in applying in respect of British Columbia the formula in subparagraph (v) of the description of A in paragraph (a) of the definition basic tax content in subsection 123(1) of the Act or the formula in subparagraph (vi) of the description of J in paragraph (b) of that definition, the description of F in paragraph (a) of that definition and the description of O in paragraph (b) of that definition are adapted to be read as “is 0%, and”. Basic tax content — real property Subsections (1) and (2) do not apply for the purposes of applying section 193 or 257 of the Act in respect of a taxable supply of real property if the supply is made by a particular person to another person, the particular person and the other person deal with each other at arm’s length and are not associated with each other and tax in respect of the supply becomes payable before April 1, 2013; or the supply is deemed to have been made under section 191 of the Act and tax in respect of the supply is deemed under that section to have been paid before April 1, 2013. Exception If a particular person is entitled to claim, in respect of a supply of real property referred to in paragraph (3)(a), an input tax credit under section 193 of the Act or a rebate under section 257 of the Act, if the amount of the input tax credit or rebate exceeds the amount of the input tax credit or rebate, as the case may be, that would be determined in the absence of that paragraph and if, within one year of the time at which tax becomes payable in respect of the supply, the particular person, or another person that does not deal at arm’s length with the particular person or with which the particular person is associated, acquires an interest in the property, then the particular person is deemed, to the extent of that excess, to have never been entitled to claim the input tax credit or rebate. [Repealed, SOR/2012-191, s. 2] Employee and shareholder benefits — 2013 In applying subsection 173(1) of the Act in respect of a supply made to an individual or a person related to the individual, the description of A in the formula in clause 173(1)(d)(vi)(B) of the Act is adapted to be read as “is 5.75%,” if a particular amount in respect of the supply is required to be included under paragraph 6(1)(a) or (e) of the Income Tax Act in computing the individual’s income from an office or employment for the individual’s 2013 taxation year and the last establishment of the employer at which the individual ordinarily worked or to which the individual ordinarily reported in 2013 in relation to that office or employment is located in British Columbia; or a particular amount in respect of the supply is required under subsection 15(1) of the Income Tax Act to be included in computing the individual’s income for the individual’s 2013 taxation year and the individual is resident in British Columbia at the end of 2013. Subsection (1) does not apply in respect of a supply if section 37 of the New Harmonized Value-added Tax System Regulations, No. 2 applies for the purpose of determining an amount of tax under subparagraph 173(1)(d)(vi) of the Act in respect of an amount that includes the particular amount referred to in subsection (1) in respect of the supply. Performance bonds If a supply is deemed under subparagraph 184.1(2)(a)(i) of the Act to have been made in British Columbia by a surety as a result of the surety carrying on a particular construction of real property situated in that province as full or partial satisfaction of the surety’s obligation under a bond, if a contract payment (within the meaning of paragraph 184.1(2)(a) of the Act) in respect of the particular construction becomes due or is paid without having become due before April 1, 2013 and if another contract payment in respect of the particular construction becomes due on or after that day without having been paid before that day or is paid without having become due on or after that day, then, in applying subsection 184.1(2) of the Act in respect of the particular construction, the formula and descriptions in clause 184.1(2)(d)(i)(A) of the Act are adapted to be read as follows: is 12%, is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due before April 1, 2013 or that are paid before that day without having become due, is 5%, and is the total of all contract payments (other than contract payments that are not in respect of the particular construction) that become due on or after April 1, 2013, without having been paid before that day or that are paid on or after that day without having become due Subsection 218.1(1.2) of Act The tax payable by a person under subsection 218.1(1.2) of the Act for the specified year (as defined in section 217 of the Act) of the person that includes April 1, 2013 and for British Columbia is equal to the amount determined by the formula is the amount that, in the absence of this section, would be the tax payable by the person under subsection 218.1(1.2) of the Act for the specified year and for British Columbia; is the number of days in the specified year before April 1, 2013; and is the number of days in the specified year. 2013 — subsection 253(1) of Act Despite subsections 39(1) to (6) of the New Harmonized Value-added Tax System Regulations, No. 2, in determining the amount of a rebate in respect of property or a service that is payable under subsection 253(1) of the Act for the 2013 calendar year, if the tax referred to in paragraph 253(1)(b) of the Act includes tax under subsection 165(2) or section 212.1 or 218.1 of the Act or Division IV.1 of Part IX of the Act calculated at the tax rate for British Columbia, the percentage is 1.75% for the purposes of the following descriptions: the description of F in paragraph (b) of the description of A in subsection 253(1) of the Act; the description of H in paragraph (c) of the description of A in subsection 253(1) of the Act; the description of E in clause (B) of the description of A in subparagraph 253(2)(a)(ii) of the Act; the description of G in clause (C) of the description of A in subparagraph 253(2)(a)(ii) of the Act; the description of E in clause (B) of the description of A in subparagraph 253(2)(c)(ii) of the Act; and the description of G in clause (C) of the description of A in subparagraph 253(2)(c)(ii) of the Act. Years after 2013 — subsection 253(1) of Act Despite subsections 39(1) to (6) of the New Harmonized Value-added Tax System Regulations, No. 2, in determining the amount of a rebate in respect of property or a service that is payable under subsection 253(1) of the Act for a calendar year after 2013, if the tax referred to in paragraph 253(1)(b) of the Act includes tax under subsection 165(2) or section 212.1 or 218.1 of the Act or Division IV.1 of Part IX of the Act calculated at the tax rate for British Columbia, the percentage is 0% for the purposes of the following descriptions: Rebate for pension entities For the purposes of determining the provincial pension rebate amount for a claim period of a pension entity (as those terms are defined in Part IX of the Act) that includes April 1, 2013, the description of C in paragraph (a) of the definition provincial pension rebate amount in subsection 261.01(1) of the Act is to be read as follows if the participating province referred to in that paragraph is British Columbia: is the percentage determined by the formula is the number of days in the claim period before April 1, 2013, and is the number of days in the claim period, and Application Sections 11 and 12 apply despite any provision of the Act. Wind-down — variation of agreement If at any time before April 1, 2013, a supplier and a recipient enter into an agreement for a taxable supply of property or a service, the supplier and the recipient at a later time either directly or indirectly vary or alter the agreement for the supply, or terminate the agreement and enter into one or more new agreements with each other or with other persons and under one or more of those agreements the supplier supplies and the recipient receives one or more supplies that includes all or substantially all the property or service referred to in paragraph (a), the supplier, the recipient and, if applicable, the other persons are not dealing with each other at arm’s length at the time the agreement referred to in paragraph (a) is entered into or at the later time, tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply referred to in paragraph (a) would have been, in the absence of the variation, alteration or termination of the agreement, calculated at the rate of 7% on all or part of the value of the consideration for the supply attributable to the property or service, tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply made under the varied or altered agreement or made under any of the new agreements, in the absence of this section, would not apply to any part of the value of the consideration for the supply, attributable to any part of the property or service, on which tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply referred to in paragraph (a) would have been, in the absence of the variation, alteration or termination of the agreement, calculated at the rate of 7%, and the variation or alteration of the agreement or the entering into of the new agreements may not reasonably be considered for both the supplier and the recipient to have been undertaken or arranged primarily for bona fide purposes other than to, directly or indirectly, reduce, avoid or defer tax or any other amount payable under Part IX of the Act or benefit in any manner from the wind-down of the new harmonized value-added tax system in British Columbia, tax under subsection 165(2) or section 218.1 of the Act or Division IV.1 of Part IX of the Act in respect of the supply made under the varied or altered agreement or made under any of the new agreements is to be calculated at the rate of 7% on any part of the value of the consideration, referred to in paragraph (e), attributable to any part of the property or service. Definitions The following definitions apply in this section. person does not include a consumer. (personne) tax benefit means a reduction, an avoidance or a deferral of tax or other amount payable under Part IX of the Act or an increase in a refund or rebate of tax or other amount under that Part. (avantage fiscal) transaction has the same meaning as in subsection 274(1) of the Act. (opération) Wind-down — transactions a transaction, or a series of transactions, involving property is made between two or more persons, all of whom are not dealing with each other at arm’s length at the time any of those transactions are made, the transaction, any of the transactions in the series of transactions or the series of transactions would in the absence of this section result directly or indirectly in a tax benefit to one or more of the persons involved in the transaction or series of transactions, and it may not reasonably be considered that the transaction, or the series of transactions, has been undertaken or arranged primarily for bona fide purposes other than to obtain a tax benefit, arising from the wind-down of the new harmonized value-added tax system in British Columbia, for one or more of the persons involved in the transaction or series of transactions, the amount of tax, net tax, input tax credit, rebate or other amount payable by, or refundable to, any of those persons under Part IX of the Act, or any other amount that is relevant for the purposes of computing that amount, is to be determined as is reasonable in the circumstances in order to deny the tax benefit to any of those persons. Denying tax benefit on transactions A tax benefit is only to be denied under subsection (2) through an assessment, reassessment or additional assessment under Part IX of the Act. Request for adjustments If, with respect to a transaction, a notice of assessment, reassessment or additional assessment involving the application of subsection (2) with respect to the transaction has been sent to a person, any person (other than a person to whom such a notice has been sent) is entitled, within 180 days after the day on which the notice was sent, to request in writing that the Minister make an assessment, a reassessment or an additional assessment, applying subsection (2) with respect to that transaction. Duties of Minister On receipt of a request by a person under subsection (4), the Minister must, with all due dispatch, consider the request and, despite subsections 298(1) and (2) of the Act, assess, reassess or make an additional assessment under Part IX of the Act with respect to the person, except that the assessment, reassessment or additional assessment may be made only to the extent that it may reasonably be regarded as relating to the transaction referred to in subsection (4). Section 2 of the British Columbia HST Regulations, as enacted by section 1, applies for the purposes of calculating tax in respect of any supply (other than a supply by way of sale of real property) made before April 1, 2013, but only in respect of the portion of the tax that becomes payable after March 31, 2013, without having been paid before April 1, 2013, or is paid after March 31, 2013 without having become payable; for the purposes of calculating tax in respect of any supply by way of sale of real property made before April 1, 2013, in respect of which tax becomes payable because of subsection 168(5) of the Act after March 31, 2013; for the purposes of applying section 172.1 of the Act in respect of a fiscal year of a person that ends after March 31, 2013, except that in respect of the fiscal year of a person that includes April 1, 2013 if the person is a participating employer of a pension plan (as those terms are defined in Part IX of the Act) that acquires property or a service for the purpose of making a supply of all or part of the property or service to a pension entity (as defined in that Part) of the pension plan before April 1, 2013, the amount determined for B for British Columbia in the formula in paragraph 172.1(5)(c) of the Act in respect of a taxable supply of all or part of the property or service that is deemed to have been made under paragraph 172.1(5)(a) of the Act is to be determined as if the tax rate for British Columbia on the last day of the fiscal year were 7%, and the amount determined for B for British Columbia in the formula in paragraph 172.1(6)(c) or (7)(c) of the Act in respect of a taxable supply deemed to have been made under paragraph 172.1(6)(a) or (7)(a) of the Act, as the case may be, is to be determined as if the tax rate for British Columbia on the last day of the fiscal year were the rate determined by the formula is the number of days in the fiscal year that are before April 1, 2013, and is the number of days in the fiscal year; for the purposes of determining, under section 181.1 of the Act, tax or an input tax credit in respect of a supply of property or a service in respect of which tax became payable after March 31, 2013; for the purposes of the description of A in clause 184.1(2)(d)(i)(A) of the Act in respect of a person acting as a surety under a performance bond in respect of a contract for a taxable supply of construction services if a contract payment (within the meaning of paragraph 184.1(2)(a) of the Act) becomes due or is paid without having become due to the person after March 31, 2013, by reason of the person carrying on the construction; for the purposes of the description of A in paragraph 202(4)(b) of the Act in respect of a taxation year of a registrant that ends after March 31, 2013, except that in respect of the taxation year of the registrant that includes April 1, 2013 the amount determined for A is to be determined as if the tax rate for British Columbia on the last day of the taxation year were 1.75%; and for the purposes of determining the tax rate for British Columbia in determining the amount for that province that, under subsection 225.2(2) of the Act, is required to be added to, or may be deducted from, the net tax for a reporting period of a financial institution that ends after March 31, 2013. Section 11 of the British Columbia HST Regulations, as enacted by section 1, applies to any agreement varied, altered or terminated on or after August 26, 2011 and to any new agreement entered into on or after that day. Section 12 of the British Columbia HST Regulations, as enacted by section 1, applies to any transaction made on or after August 26, 2011.